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Redeployment of working capital used to buy and feed cattle, longstanding partnership with Friona Industries, assured supply, led to decision
WICHITA, Kan. and AMARILLO, Texas - July 8, 2016 – Cargill is announcing the sale of its beef cattle feed yards at Bovina and Dalhart, Texas, to Amarillo-based Friona Industries, L.P. Terms of the pending sale are not being disclosed. Finalization of the transaction will take place upon the completion of definitive agreements and any required regulatory reviews. Cargill will retain its cattle feed yards at Yuma, Colo., and Leoti, Kan.
“Selling our feed yards in the Texas panhandle allows us to redeploy many tens of millions of dollars annually into investments that will help us grow our protein business – money that otherwise would have been tied up as working capital used to purchase and feed cattle,” said John Keating, president of Cargill’s Wichita-based beef business. “This decision makes sense particularly because we have a terrific and longstanding business relationship with Friona Industries, which already supplies Cargill with excellent cattle from their four feed yards. The Texas feed yards we are selling will continue to supply cattle to our beef processing plants while also enhancing Friona Industries’ feed yard portfolio.”
Sale of Cargill’s Texas cattle feed yards aligns with the company’s evolving protein business strategy which emphasizes growth fueled by being the supplier of choice for customers and by providing them with superior products and services. “We are investing to better serve and delight our current and future customers,” stated Keating. “Anticipating the future direction protein demand is headed, we believe it is wise to redeploy capital away from feed yard and cattle ownership to projects that enhance our capabilities and provide greater value to our customers and consumers, now and in the future.”
Over the past 12 months, Cargill has announced approximately $500 million in acquisitions and capital investments to grow its North American protein business. Investments include: purchase of a beef processing plant in South Carolina and a custom cooked meats, soups and sauces business with plants in Texas and Tennessee; conversion of a Nebraska ground beef plant to a specialized cooked meats plant; a new beef distribution center at the company’s Dodge City, Kan., beef processing facility; and an expansion of egg processing capabilities at a Michigan plant.
“These are concrete examples of our ongoing commitment to grow our protein business,” said Keating. “We have a lot of positive momentum and are confident it will continue to build going forward as we continue to help our customers’ businesses thrive.”
The approximately 90 people who currently work at Cargill’s Bovina and Dalhart feed yards will be offered positions with Friona Industries.
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About Cargill
Cargill provides food, agriculture, financial and industrial products and services to the world. Together with farmers, customers, governments and communities, we help people thrive by applying our insights and 150 years of experience. We have 149,000 employees in 70 countries who are committed to feeding the world in a responsible way, reducing environmental impact and improving the communities where we live and work. For more information, visit Cargill.com and our News Center.
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